Sheriff's deputies, auditors descend on Harvey's city hall

County, state officials descend on Harvey's City Hall

Officials from the Cook County Sheriff's office and Illinois Comptroller's office arrive at Harvey's City Hall unannounced on March 21, 2014 to perform a review of the city's financial records. (Zbigniew Bzdak/Chicago Tribune)

Officials from the Cook County Sheriff's office and Illinois Comptroller's office arrive at Harvey's City Hall unannounced on March 21, 2014 to perform a review of the city's financial records. (Zbigniew Bzdak/Chicago Tribune)

Cook County sheriff's deputies and officials from the state comptroller's office descended on Harvey's City Hall on Friday to begin auditing financial records in an effort to enforce a watchdog law long ignored by the scandal-plagued south suburb.

The action came on the same day the Tribune reported on questionable insider deals in Harvey occurring while the city's appointed comptroller is warning that the suburb is heading toward financial ruin. The deals included $88,000 to a firm tied to the mayor's son for social media work — the quality of which experts questioned.

That story followed a series of Tribune articles in February that documented how Harvey has become arguably the most lawless community in the region, reeling from the effects of high violent crime rates, subpar policing and shaky finances amid ineffectual or nonexistent oversight from state and federal authorities. That included the suburb failing for years to follow a law — overseen by the state comptroller — that requires cities and villages to perform yearly audits.

Under Illinois law, if a town does not complete its audit, the state comptroller is allowed to hire auditors to do it and bill the town for the work.

On Friday, four sheriff's vehicles arrived at the south suburb's aging City Hall, joined by an SUV and a minivan with state plates. About a dozen people from those vehicles entered City Hall and walked into the office of the city clerk, an elected official whose job includes keeping and tracking the city's records.

One of Sheriff Tom Dart's top aides, Cara Smith, told the Tribune that the deputies were there to assist the comptroller's office in beginning the process of auditing Harvey's books.

Brad Hahn, spokesman for state Comptroller Judy Baar Topinka, said representatives from their office went “to assist the city with its financial reporting.” He would not say whether the office would review any of the insider deals highlighted in the newspaper.

He said the agency was limited in what additional details it could give, repeating what it had told the Tribune earlier — that there was an ongoing investigation by an agency he wouldn't name to which the comptroller has already forwarded some records.

The comptroller's office declined to elaborate on the investigation, or say if it is related to an investigation by the U.S. Securities and Exchange Commission on a failed insider development deal previously exposed by the Tribune that cost taxpayers $10 million.

Mayor Eric Kellogg was seen going into City Hall about 15 minutes after deputies and auditors arrived. He later issued a statement through a spokeswoman that said the group had a “very productive meeting.”

“We appreciate the assistance of the comptroller's office in assisting us as it relates to becoming current with our financial reporting requirements,” the mayor said.

The move by Dart and Topinka comes seven years after another high-profile unannounced visit by outside authorities, that time armed with subpoenas. Then, deputies were joined by county prosecutors and state police seeking evidence that had long been ignored by Harvey police in murder and rape cases.

But while authorities have looked inside Harvey's Police Department, none had publicly examined its finances. Dart, long critical of Harvey's policing, has been looking for a way to get a peek at the books. After the Tribune series in February, he pushed County Board members to adopt an ordinance that would allow him to act as the inspector general for suburbs that failed to file audits. But that legislation has run into opposition from suburban mayors and politicians, including County Board President Toni Preckwinkle, who say it's the state's responsibility to force audits.

It's unclear what level of access his office will be given to the records gathered by auditors. When the state comptroller's spokesman was asked if the sheriff's people would also be reviewing the records, the spokesman responded that the comptroller's office would be using its own accountants.

“Our auditors will be reviewing city financial records and working to bring Harvey into compliance with state reporting laws. If the auditors find financial impropriety, that information will be turned over to the appropriate law enforcement agency,” Hahn said in an email.

Harvey is four years behind on the audits, making it difficult — if not impossible — for outsiders and residents to get a clear grasp of the city's financial health.

Records the Tribune obtained suggest that the city is nearly insolvent — borrowing big in recent years yet still spending millions more than it took in, while starving its pension funds and stiffing Chicago on water that the suburb bought and resold. Chicago has sued Harvey. Records show Chicago is owed $18 million for unpaid water bills, about the same amount Harvey takes in from taxes and fees in an entire year.

Kellogg has bristled at the idea of outside intervention. Last year Dart offered to act as the city's inspector general — an offer eventually made to other suburbs. The Harvey mayor declined the request, calling it “political posturing.”

Cook County sheriff's deputies and officials with the state comptroller's office descended on Harvey's city hall to comb through financial records in an effort to enforce a watchdog law long-ignored by the scandal-plagued south suburb. A series of Tribune articles documented how Harvey has become...

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